UK Government Announces Mandatory Human Rights Due Diligence Law

On 4 November 2026, the Secretary of State for Business and Trade, Jonathan Reynolds, made a Written Ministerial Statement to Parliament on Responsible Business Conduct (RBC) (the Statement). The Statement announced that the government will legislate to introduce a mandatory human rights due diligence regime for the largest businesses across the UK for services, and in Great Britain for goods. The measures will be introduced “as soon as parliamentary time allows”.

In this article, we consider the background to the announcement, the key features of the proposed regime, comparison with the EU Corporate Sustainability Due Diligence Directive (EU CSDDD) and Forced Labour Regulation (EU FLR), comparison with the US approach, the interaction of the proposed regime with existing UK criminal law and corporate prosecution risk, and potential implications for businesses operating across jurisdictions. At this stage no draft legislation or indicative timetable has been released, so details and timings of the regime remain subject to change.

Background

In its Trade Strategy, the government committed to an evidence-based review of the UK’s approach to promoting RBC. The review found the UK’s current framework for preventing forced labour to be “fragmented and overly reliant on voluntary action and reporting measures”. The primary framework is the Modern Slavery Act 2015, which requires companies doing business in the UK with a global turnover of at least £36m to publish an annual modern slavery statement. The Modern Slavery Act also creates criminal offences of slavery, servitude, and forced or compulsory labour (section 1) and human trafficking (section 2), and provides for slavery and trafficking prevention and risk orders. These offences are not limited to direct perpetrators: secondary and inchoate liability may also be relevant.

Although the Modern Slavery Act was pioneering when introduced, the government acknowledged that international standards and legislative practice have since moved on, leaving the UK “out-of-step with G7 partners and other major trading economies”. Plans to strengthen the Modern Slavery Act through the Immigration and Asylum Bill were described as an important step, but insufficient on their own.

The announcement also follows the imposition of new US tariffs on UK imports earlier this year, after the US Trade Representative listed the UK among trading partners that have failed to impose and effectively enforce a ban on importing goods produced with forced labour. The Statement emphasised the need to align with major trading partners.

The government announcement for a UK regime for mandatory due diligence comprises of several elements:

1. Mandatory due diligence: In-scope businesses must identify, assess, and address risks of human rights abuses and labour exploitation within their operations and supply chains.
2. Market withdrawal powers: A regulator will be able to investigate and direct the withdrawal of goods made with forced labour from the Great Britain market.
3. Northern Ireland: The EU FLR will apply in Northern Ireland under the Windsor Framework.
4. Guidance hub: A centralised guidance hub on GOV.UK will bring together guidance, tools, and templates, particularly for businesses developing due diligence processes for the first time.

Key Features of the Proposed Regime

Scope and Thresholds

The regime will apply only to what the government describes as “the largest businesses, with the capability and leverage to manage these risks within their supply chains”. The proposed threshold is a global turnover of over £350 million for UK businesses, and UK-generated turnover of over £350 million for non-UK businesses (it is not clear at this stage whether these turnover figures will be required to be met at a legal entity level, or across a corporate group). The inclusion of non-UK businesses by reference to UK turnover means that overseas groups with significant UK sales will be captured regardless of where they are headquartered.

The territorial application differs by subject matter: the due diligence regime will apply across the UK for services, but in Great Britain only for goods, reflecting the position of Northern Ireland under the Windsor Framework. Several details, such as how turnover will be calculated at group level, whether any employee threshold will apply, and how financial services will be treated, remain to be confirmed.

Substantive Obligations and International Standards

In-scope businesses will be required to identify, assess, and address risks of human rights abuses and labour exploitation within their operations and supply chains. The government has described the regime as “risk-based, proportionate” and designed to “reflect how responsible businesses already manage risk” by aligning with the OECD Guidelines for Responsible Business Conduct and the UN Guiding Principles on Business and Human Rights (UNGPs).

The Statement stresses that requirements will “prioritise action over unnecessary paperwork”, signalling a shift away from the disclosure-led model of the Modern Slavery Act. Notably, the Statement is confined to human rights and labour exploitation; unlike some international regimes including the EU CSDDD, it does not extend to environmental impacts.

Enforcement: Market Withdrawal of Forced Labour Goods

Central to the enforcement framework is a power to remove goods made with forced labour from the Great Britain market, which follows the approach taken under the EU FLR. A regulator will be empowered to investigate businesses suspected of placing such goods on the market and, where due diligence obligations have not been met and forced labour is identified, to direct their withdrawal. The government presents this as a targeted mechanism for tackling some of the most serious abuses in global supply chains and protecting responsible businesses from unfair competition. Again, a number of details have not yet been specified, including the identity of the regulator, its investigatory powers, any financial penalties, whether failure to comply with a withdrawal direction will be a criminal offence, whether officers may be personally liable, how the regulator will share information with and refer matters to law enforcement agencies, and the availability of civil remedies. If the regime develops into an import prohibition, existing customs offences, such as knowingly being concerned in the fraudulent evasion of a prohibition or restriction under section 170 of the Customs and Excise Management Act 1979, and the seizure and forfeiture of goods, may also become relevant.

Northern Ireland and the Guidance Hub

In Northern Ireland, the government will apply the EU FLR under the Windsor Framework. The government states that both regimes ensure goods made with forced labour can be withdrawn from the market and aim to deliver a similar effect in practice. Businesses supplying goods into both Great Britain and Northern Ireland should nonetheless expect two distinct legal frameworks, and potentially different authorities and procedures, for forced labour enforcement.

Comparison With the EU CSDDD

Although both regimes share a common foundation in the UNGPs and OECD Guidelines, the UK proposed approach differs in several respects.

Scope of Obligations

The UK threshold of £350 million turnover, with no employee test announced, is materially lower than the EU CSDDD thresholds as amended by Omnibus I (broadly, more than 5,000 employees and €1.5 billion net worldwide turnover for EU groups, and €1.5 billion EU turnover for non-EU groups). A larger number of mid-to-large groups may therefore fall within the UK regime than within the EU CSDDD, including non-EU groups that fell outside the EU CSDDD once Omnibus I raised its thresholds.

Conversely, the EU CSDDD covers adverse environmental impacts as well as human rights impacts, whereas the UK regime, as announced, is limited to human rights abuses and labour exploitation. Both regimes capture non-EU groups by reference to turnover generated in the relevant market.

Supply Chain Due Diligence

Both regimes adopt a risk-based model requiring companies to identify, assess, and address adverse impacts. The CSDDD prescribes a detailed process, covering integration into policies, identification and prioritisation, prevention and cessation, remediation, stakeholder engagement, complaints mechanisms, monitoring, and annual reporting, across the company’s “chain of activities”. The UK Statement refers more generally to “operations and supply chains” and does not yet specify the depth of value chain coverage. Businesses therefore may not be able to assume a CSDDD-compliant process will automatically satisfy UK requirements, although alignment with the same international standards should allow a single, group-wide framework to serve both.

Enforcement Mechanisms

The EU CSDDD relies on national supervisory authorities with powers of investigation, orders, and pecuniary penalties (capped under Omnibus I at 3% of net worldwide turnover). The UK regime, as announced, centres on a product-focused remedy, namely the withdrawal of goods made with forced labour from the market. In this respect the UK model resembles the EU FLR more closely than the EU CSDDD, effectively combining a due diligence obligation with a market-access sanction. However, the absence (so far) of detail on any UK penalty regime should not be read as an absence of enforcement risk: as explained below, existing UK criminal law already attaches significant consequences to forced labour in supply chains.

Implications for Businesses Operating Across Both Jurisdictions

Groups with operations in both the UK and the EU will face a layered compliance landscape. Some groups below the EU CSDDD thresholds will face mandatory due diligence for the first time under UK law, while groups within both regimes will need to reconcile differences in subject matter, process detail, and enforcement. Groups exposed to several regimes may also face parallel investigations in the UK, the EU, and the US, which will require coordinated handling of disclosures and consistent positions across authorities.

Comparison With the US Approach

While the US does not have a federal due diligence regime equivalent to the EU CSDDD, importing into the US market entails a separate set of rules, many of which are based on import prohibitions. Section 307 of the Tariff Act of 1930 prohibits goods mined, produced, or manufactured wholly or in part by forced labour from entering the US, and US Customs and Border Protection may enforce this prohibition by detaining or seizing goods. The Uyghur Forced Labor Prevention Act (UFLPA) builds on this prohibition by establishing a rebuttable presumption that goods mined, produced, or manufactured wholly or in part in the Xinjiang Uyghur Autonomous Region of China or by entities on the UFLPA Entity List are made with forced labour and therefore are impermissible by virtue of Section 307.

Pending the release of further details, the proposed UK regime differs from the US approach in that it combines mandatory due diligence with a power to withdraw goods from the market. Businesses supplying both markets will need to pair their supply chain traceability, including any evidence needed to clear goods into the US, with these broader governance considerations.

Criminal Law and Corporate Prosecution Risk

The new regime will operate alongside existing UK criminal law, and what a business learns through due diligence, and the adequacy of the due diligence it carries out, will be directly relevant to its exposure. Key risks include:

• Money laundering: Goods made with forced labour, and the proceeds of selling them, may be “criminal property” under the Proceeds of Crime Act 2002 (sections 327–329). Once due diligence identifies a risk, continuing to deal with them may require an authorised disclosure to the National Crime Agency seeking a defence against money laundering.

• Failure to prevent fraud: Since 1 September 2025, large organisations may be liable under the Economic Crime and Corporate Transparency Act 2023 (ECCTA) where misleading supply chain claims (for example, in modern slavery statements, sustainability reports or tenders) amount to fraud by an associated person intending to benefit the organisation, unless reasonable prevention procedures were in place.

• Senior manager attribution: Section 196 ECCTA allows a company to be liable for economic crimes committed by its senior managers. Any new offences may also carry personal liability for directors and officers.

• Investigations: The new regulator is likely to share information with the Serious Fraud Office, National Crime Agency and HM Revenue & Customs. Businesses should plan for self-reporting decisions and structure supplier audits to preserve legal privilege where possible.

Implications and Next Steps

The government has committed to work closely with stakeholders on the design and implementation of the measures and to introduce them as soon as parliamentary time allows, but has not published draft legislation or a timetable.

This article was prepared with the assistance of Samantha Banfield at Latham & Watkins.

Latham & Watkins will continue to monitor developments relating to UK responsible business conduct and the international supply chain due diligence landscape.